Corbett: Pa. economy improving

HARRISBURG — A slowly recovering economy is helping to boost revenues to Commonwealth’s coffers, but most of that additional money may be consumed by rising pension costs, according to the Corbett administration.

“I think our economy is moving forward,” Corbett said during an hour-long sit-down with a group of Digital First Media journalists Thursday.

Corbett called the meeting to talk about the need for pension reform, but also addressed other subjects, including the recovering economy.

Corbett often refers to the state pension crisis as “the tapeworm in the budget,” and his Treasury Secretary, Charles Zogby, said increases in pension costs will jump by almost $700 million in 2013, consuming nearly all the additional $800 million the state anticipates being pumped into the budget as a result of the improving economy.

Corbett said his insistence on holding the line on taxes has helped to keep the cost of living down and to attract businesses and residents from neighboring Maryland and New Jersey.

“All I have to do ... is watch the cars moving in,” Corbett said. “You see all the Maryland plates down there? They’re moving up here. Why? Gov. (Martin) O’Malley’s done a fair amount of raising taxes, as far as I understand.”

And although he laid responsibility for those taxes at the feet of Maryland’s Democratic governor, when it came to New Jersey, Corbett said the high tax load there is not the fault of fellow Republican governor Chris Christie.

In both cases, however, Corbett said high taxes in surrounding states are helping to attract jobs and improve Pennsylvania’s economic outlook.

“We’ve seen 108,000 new jobs added in the private sector and unemployment has ticked down to 7.9 percent,” Corbett said.

“The impact to Pennsylvania’s economy from the extraction of natural gas from the Marcellus Shale has the potential to boost employment growth in some rural parts of the commonwealth that could certainly benefit from more jobs,” the report said, noting however that, “the impact on jobs, income and industrial development is still unfolding.”

Corbett noted that the average income in the Marcellus Shale gas drilling industry is $83,065 — “that’s $35,000 above the average Pennsylvania salary,” he said.

The report also found that the jobs created by Marcellus Shale are focused in low-income counties and represents a 1 percent growth in employment in those counties during a time when most of the nation was seeing unemployment rates rise.

And Corbett pointed to last year’s passage of Act 13, which governs drilling operations in Pennsylvania, as one of the more significant accomplishments the last session of the legislature made for the economy, even though portions of the law were struck down last summer by the courts. A final decision is pending.

Corbett also pointed to tort reform legislation as being helpful to the economy.

“We got a lot done in the last two years,” said Corbett. “The legislature did a great job.”

“The Pennsylvania economy is faring better than most other states in terms of the job situation and the budget outlook,” Wells Fargo Bank concluded in its December report. “Household income in the Keystone State now exceeds its pre-recession peak, although much of the growth has come from increased transfer payments from the government.”

Looking forward, Corbett said the best things Harrisburg could do to aide the economy in 2013 is to adopt a transportation bill to fix roads, bridges and other transportation infrastructure and move forward with a proposal to privatize liquor sales in Pennsylvania.

“When you add money for road and bridge repair, you also create jobs,” Corbett said.

An August 2010 study by the Pennsylvania Transportation Funding Advisory Commission found that a $3.5 billion gap exists between revenues from Pennsylvania’s gasoline tax revenues and its transportation infrastructure needs.

By 2020, the report said, that gap would increase to $7.2 billion.

Asked where Pennsylvania will get the money to step up its transportation reconstruction efforts, Corbett, referring to his Feb. 5 budget presentation, said “you’ll know soon enough.”